The ACIT, Circle-5,, Ahmedabad v. Parle International Pvt. Ltd.,, Ahmedabad

ITA 980/AHD/2007 | misc
Pronouncement Date: 02-12-2010 | Result: Partly Allowed

Appeal Details

RSA Number 98020514 RSA 2007
Assessee PAN AAACP9018Q
Bench Ahmedabad
Appeal Number ITA 980/AHD/2007
Duration Of Justice 3 year(s) 8 month(s) 26 day(s)
Appellant The ACIT, Circle-5,, Ahmedabad
Respondent Parle International Pvt. Ltd.,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 02-12-2010
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 02-12-2010
Date Of Final Hearing 30-11-2010
Next Hearing Date 30-11-2010
Assessment Year misc
Appeal Filed On 06-03-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE S/SHRI G. D. AGARWAL VP AND BHAVNESH SAINI JM) ITA NO.980/AHD/2007 A. Y.: 1988-89 THE A. C. I. T. CIRCLE-5 C. U. SHAH COLLEGE BUILDING 2 ND FLOOR AHMEDABAD VS PARLE INTERNATIONAL PVT. LTD. 101 GIDC VATVA AHMEDABAD PA NO. AAACP 9018 Q (APPELLANT) (RESPONDENT) APPELLANT BY SHRI M. MATHIVANAN DR RESPONDENT BY SHRI J. P. SHAH AR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-XI AHMEDABAD DATED 21-12-2006 FOR ASSESSMENT YEAR 1988-89 CHALLENGING THE ORDER OF T HE LEARNED CIT(A) IN CANCELING THE PENALTY LEVIED U/S 271 (1) ( C ) OF T HE IT ACT. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND C ONSIDERED THE MATERIAL ON RECORD. 3. BRIEFLY THE FACTS OF THE CASE ARE THAT THE AO H AS LEVIED PENALTY U/S 271 (1) ( C ) OF THE IT ACT ON THE GROUND THAT T HE ADDITIONS OF (I) RS. 3 97 252/- ON ACCOUNT OF SUPPRESSION OF SALES (II) RS.97 00 626/- ON ACCOUNT OF DEPRECIATION AND (III) RS. 32 00 000/- O N ACCOUNT OF CLAIM OF DEDUCTION U/S 80 I OF THE IT ACT WERE CONFIRMED BY THE LEARNED CIT(A). IT WAS ALSO NOTED THAT THE AO ISSUED SHOW CAUSE NOTICE WHICH HAS BEEN REPLIED BY THE ASSESSEE. THE REPLY OF THE ASSESSEE WAS HOWEVER NOT CONSIDERED BY THE AO AS SATISFACTORY AND PENALTY WA S ACCORDINGLY IMPOSED VIDE SEPARATE ORDER. PENALTY ORDER WAS CHAL LENGED BEFORE THE LEARNED CIT(A) AND IT WAS SUBMITTED THAT IN THE ASS ESSEES CASE IT HAS ITA NO.980/AHD/2007 ACIT CIR-5 AHMEDABAD VS PARLE INTERNATIONAL PVT. LTD. 2 NEITHER FURNISHED ANY INACCURATE PARTICULARS OF INC OME NOR CONCEALED ANY INCOME. ALL THE THREE ITEMS ON WHICH PENALTY HA S BEEN IMPOSED HAS BEEN CONSIDERED BY THE LEARNED CIT(A) SEPARATELY. T HE GIST OF THE SAME IS AS UNDER: (I) CLAIM OF DEPRECIATION : IT WAS SUBMITTED THAT THE CLAIM OF DEPRECIATION ON TRIAL PRODUCTION WAS RIGHTLY MADE WHICH WAS IN ACCORDANCE WITH LAW L AID DOWN BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF ASHIM A SYNTEX LTD. THEREFORE THE DISALLOWANCE OF DEPRECIATION ON TRIA L PRODUCTION WAS NOT WARRANTED AND NO PENALTY SHOULD BE IMPOSED. IT WAS ALTERNATIVELY CONTENDED THAT THERE EXISTS A CONSIST ENT CONTROVERSY BETWEEN TRIAL PRODUCTION AND COMMERCIAL PRODUCTION AND IT WAS NOT A FRAUD ON THE PART OF THE ASSESSEE TO CLAIM DE PRECIATION. IT WAS ALSO CLAIMED THAT THE CLAIM OF DEPRECIATION ON THE NOODLES MANUFACTURING PLANT WAS MADE WHICH WAS SET UP IN TH E YEAR OF APPEAL. THE PRODUCTION OF MANUFACTURING NOODLES WAS STARTED ON 26-03-1988 AND THE ASSESSEE PRODUCED SUFFICIENT MAT ERIAL THAT PRODUCTION STARTED ON 26-03-1988 ONWARDS AND THE SA ME FACT WAS ALSO MENTIONED IN THE BOOKS OF ACCOUNT AND THIS FAC T HAS NOT BEEN CHALLENGED BY THE AO. IT WAS FURTHER SUBMITTED THAT CONFIRMATORY CERTIFICATE OF THE COMPANIES WHO HAVE PROVIDED DIES EL AND OIL WAS ALSO PROVIDED TO SHOW THAT GENERATOR WAS USED FOR T HE PURPOSE OF PRODUCTION. RELEVANT PAPERS LIKE BILL FOR PURCHASE OF RAW MATERIALS TRANSPORTATION CERTIFICATE OF BOILER AND CERTIFICA TE OF PROJECT MANAGER WAS FILED TO PROVE THAT PRODUCTION STARTED IN THE ASSESSMENT YEAR UNDER APPEAL. IT WAS THEREFORE SU BMITTED THAT THE ASSESSEE WAS ENTITLED FOR DEPRECIATION. THEREFO RE PENALTY SHOULD NOT BE IMPOSED ON THAT MATTER. THE LEARNED C IT(A) CONSIDERING THE SUBMISSION OF THE ASSESSEE AND MATE RIAL ON RECORD ACCEPTED THE CONTENTION OF THE ASSESSEE AND CANCELL ED THE PENALTY ITA NO.980/AHD/2007 ACIT CIR-5 AHMEDABAD VS PARLE INTERNATIONAL PVT. LTD. 3 ON THE ADDITION MADE ON ACCOUNT OF CLAIM OF DEPRECA TION. THE FINDINGS OF THE LEARNED CIT(A) IN PARA 4.1.4 4.1.5 AND 4.1.6 ARE REPRODUCED AS UNDER: 4.1.4 AFTER VERIFYING THE SUBMISSIONS MADE BY THE A. R. I AM OF THE OPINION THAT THE ISSUE WITH REGARD TO DEPRECIATION IS A DEBATABLE ONE THE LEVY OF PENALT Y U/S. 271 (1) ( C ) OF I. T. ACT IS NOT WARRANTED. 4.1.5 IT IS FURTHER SEEN THAT THE APPELLANT MADE T HE DEPRECIATION IN GOOD FAITH WHICH HOWEVER IS NOT A CCEPTED BY THE A.O. THEREFORE IT CANNOT BE SAID THAT VERY CL AIM MADE WAS WITH A MALAFIDE INTENTION. 4.1.6 HAVING CONSIDERED THE FACTS AND CIRCUMSTANCE S OF THE CASE I FIND THAT THE LEVY OF PENALTY ON DISALL OWANCE CONFIRMED TOWARDS DEPRECIATION IS NOT SUSTAINED. (II) SUPPRESSION OF SALES: IT WAS SUBMITTED THAT DISALLOWANCE WAS MADE ON ACCO UNT OF LOW YIELD OF PRODUCTION OF MANGO PULP WHICH WAS MAD E ON AD HOC AND ESTIMATED BASIS. THEREFORE NO PENALTY SHOU LD BE IMPOSED. THE LEARNED CIT(A) ACCEPTED THE CONTENTION OF THE ASSESSEE AND NOTED THAT THE ADDITION IS MADE ON EST IMATE. THE ESTIMATION OF LOW YIELD AND ULTIMATE ALLEGED SU PPRESSION OF SALES ARE NOT PROVED BEFORE LEVY OF PENALTY. THE REFORE PENALTY SHOULD NOT BE IMPOSED. PENALTY WAS ACCORDIN GLY CANCELED. (III) CLAIM U/S 80 I: IT WAS SUBMITTED THERE WAS INADVERTENT MISTAKE IN COMPUTATION OF CLAIM U/S 80 IA WHICH IS CORRECTED B Y THE ASSESSEE AT THE ASSESSMENT STAGE AND THE ASSESSEE M ADE BONA FIDE CLAIM OF THE DEDUCTION AND HAS NOT FURNIS HED ANY WRONG PARTICULARS OF INCOME. IT WAS FURTHER SUBMITT ED THAT ITA NO.980/AHD/2007 ACIT CIR-5 AHMEDABAD VS PARLE INTERNATIONAL PVT. LTD. 4 SINCE THE PENALTY PROCEEDINGS ARE QUASI CRIMINAL PR OCEEDINGS AND THAT THE ASSESSEE HAS NOT ACTED IN CONSCIOUS DI SREGARD OF ITS OBLIGATIONS THEREFORE PENALTY SHOULD NOT B E IMPOSED EVEN IF THE ASSESSEE ACCEPTED THE ADDITION BEFORE T HE AO. IT WAS FURTHER SUBMITTED THAT THE AO GRANTED RELIEF ON THE BASIS OF PROFIT OF UNDERTAKING LESS PRORATE ADMINISTRATIV E EXPENSES OF CENTRAL OFFICE DUE TO WHICH CLAIM WAS REDUCED. T HEREFORE ASSESSEES CLAIM WAS PRIMA FACIE ON CORRECT LEGITI MATE AND BONA FIDE CLAIM. IT WAS THEREFORE EXPLAINED THAT PENALTY SHOULD NOT BE IMPOSED ON SUCH A MATTER. THE LEARNED CIT(A) ACCEPTED THE CLAIM OF THE ASSESSEE AND RELIED UPON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F HINDUSTAN STEEL LTD. VS STATE OF ORISSA 83 ITR 26 A ND HELD THAT ASSESSEES CLAIM WAS NOT INCORRECT AND THAT REPLY OF THE ASSESSEE HAS BEEN ACCEPTED. THEREFORE PENALTY SHOU LD NOT BE IMPOSED ON SUCH AN ADDITION. THE LEARNED CIT(A) ACCORDINGLY CANCELED THE PENALTY. 4. THE LEARNED DR CHALLENGING THE ORDER OF THE LEAR NED CIT(A) IN CANCELING THE PENALTY OF ALL THE ITEMS RELIED ON T HE ORDER OF THE AO AND SUBMITTED THAT ON ACCOUNT OF SUPPRESSION OF SALES THE MATTER WAS CONSIDERED BY ITAT AHMEDABAD BENCH ON QUANTUM VIDE ORDER DATED 29-08-2000 AND THE MATTER HAS BEEN RESTORED TO THE FILE OF THE AO FOR RECONSIDERATION. THE LEARNED DR SUBMITTED THAT AGAI N ADDITION WAS MADE BY THE AO; THEREFORE PENALTY SHOULD NOT BE CANCELL ED ON SUCH A MATTER. WITH REGARD TO DEPRECIATION THE LEARNED DR SUBMITT ED THAT ITAT AHMEDABAD BENCH CONFIRMED THE ADDITION ON ACCOUNT O F WRONG CLAIM OF DEPRECIATION AS PER PARA 14 OF THE ORDER DATED 29-0 8-2000 AND SINCE ADDITION HAS BEEN CONFIRMED BY THE TRIBUNAL THEREF ORE PENALTY SHOULD NOT HAVE BEEN CANCELED BY THE LEARNED CIT(A). MOREO VER THE LEARNED CIT(A) HAS NOT GIVEN ANY REASONS FOR DECISION IN CA NCELING THE PENALTY ITA NO.980/AHD/2007 ACIT CIR-5 AHMEDABAD VS PARLE INTERNATIONAL PVT. LTD. 5 AND THE ORDER OF THE LEARNED CIT(A) IS INCORRECT TO SAY THAT IT WAS A DEBATABLE ISSUE BECAUSE THERE WAS NO DEBATE LEFT AF TER CONFIRMATION OF THE ADDITION BY THE TRIBUNAL. HE HAS SUBMITTED THAT THERE IS NO NEED TO PROVE ANY NEXUS OR MALA FIDE ON THE PART OF THE ASS ESSEE AND THAT MAKING WRONG AND BOGUS CLAIM OF DEDUCTION IN THE RETURN OF INCOME WOULD JUSTIFY LEVY OF PENALTY. HE HAS RELIED UPON THE DECISION OF THE HONBLE KERALA HIGH COURT IN THE CASE OF KUTTOOKARAN MACHINE TOOLS VS ACIT AND ANOTHER ( 313 ITR 413) IN WHICH IT WAS HELD AS UNDE R: HELD THAT THE ASSESSEE HAD MADE BOGUS CLAIMS OF INVESTMENT ALLOWANCE AND DEPRECIATION IN RESPECT OF MACHINERY WHICH WAS NOT PURCHASED INSTALLED OR COMMISSIONED DURING THE PREVIOUS YEAR. THOUGH THE RETURNS WERE PREPARED BY THE AUDITOR FOR THE ASSESS EE IT WAS FOR THE ASSESSEE TO ENSURE THAT WRONG CLAIMS WERE NOT MADE BY THE PRACTITIONER OR AUDITOR. IMPOSITION OF PENALTY WAS VALID. AS REGARDS CLAIM U/S 80 I OF THE IT ACT THE LEARNE D DR SUBMITTED THAT THE ASSESSEE ACCEPTED THE WRONG CLAIM BEFORE THE AO AT THE ASSESSMENT STAGE AND THAT NO APPEAL WAS PREFERRED BEFORE THE L EARNED CIT(A) OR BEFORE THE TRIBUNAL. THEREFORE PENALTY WAS RIGHTLY IMPOSED FOR SUCH A MATTER WHICH SHOULD NOT HAVE BEEN DELETED BY THE LE ARNED CIT(A). HE HAS RELIED UPON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS ZOOM COMMUNICATION PVT. LTD. 327 ITR 510 CON SIDERING THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F RELIANCE PETROPRODUCTS PVT. LTD. (SUPRA) RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE DISTINGUISHED THE SAME IN THE ORDER AN D HAS HELD AS UNDER: HELD THAT ADMITTEDLY IN VIEW OF THE PROVISIONS CONTAINED IN SECTION 40(A) (II) OF THE ACT THE AMO UNT OF INCOME-TAX COULD NOT HAVE BEEN CLAIMED AS A DEDUCTI ON WHILE COMPUTING INCOME OF THE ASSESSEE. AS REGARDS THE AMOUNT CLAIMED ON ACCOUNT OF UNUSABLE AND DISCARDED ASSETS THE TRIBUNAL WAS ENTIRELY INCORRECT IN TAK ING THE VIEW THAT THE DEDUCTION CLAIMED BY THE ASSESSEE ITA NO.980/AHD/2007 ACIT CIR-5 AHMEDABAD VS PARLE INTERNATIONAL PVT. LTD. 6 WAS ADMISSIBLE TO IT UNDER SECTION 32(1) (III). CLA USE (I) OF SUB-SECTION (1) OF SECTION 32 RELATES TO ASSETS OF AN UNDERTAKING ENGAGED IN GENERATION AND/OR DISTRIBUTI ON OF POWER. ADMITTEDLY THE ASSESSEE-COMPANY WAS NOT ENGAGED IN GENERATION AND FOR DISTRIBUTION OF POWER DURING THE RELEVANT YEAR. THUS THE PROVISIONS OF C LAUSE (I) OF SUB-SECTION (1) OF SECTION 32 WOULD NOT APPL Y IN RESPECT OF THE ASSETS CLAIMED TO HAVE BECOME UNUSAB LE AND WRITTEN OFF. THEREFORE THE ASSESSEE HAD NO JUSTIFICATION TO CLAIM THIS AMOUNT OF RS.13 24 539 AS A REVENUE EXPENDITURE. IN FACT THE ASSESSEE DID NOT CLAIM EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE COMMISSIONER (APPEALS) THAT SUCH A DEDUCTION WAS PERMISSIBLE UNDER SECTION 32(1) (II). IT WAS ALSO N OT THE CASE OF THE ASSESSEE THAT IT WAS UNDER A BONA FIDE BELIEF THAT THESE TWO AMOUNTS COULD BE CLAIMED AS REVENUE EXPENDITURE. THE ASSESSEE WAS A COMPANY WHICH MUST BE HAVING PROFESSIONAL ASSISTANCE IN COMPUTATION OF ITS INCOME AND ITS ACCOUNTS WERE COMPULSORILY SUBJECTE D TO AUDIT. THE TRIBUNAL ERRED IN LAW IN DELETING THE PE NALTY IN RESPECT OF THE AMOUNT OF RS. 1 LAKH CLAIMED AS DEDUCTION ON ACCOUNT OF PAYMENT OF INCOME-TAX AND T HE AMOUNT OF RS.13 24 539 DEBITED UNDER THE HEAD EQUIPMENT WRITTEN OFF IN THE PROFIT AND LOSS ACC OUNT OF THE ASSESSEE. THE LEARNED DR SUBMITTED THAT THE ASSESSEE KNOWINGL Y MADE FALSE CLAIM THEREFORE PENALTY WAS RIGHTLY IMPOSED. 5. ON THE OTHER HAND THE LEARNED COUNSEL FOR THE A SSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW A ND SUBMITTED THAT ON SUPPRESSION OF SALES WAS ESTIMATED AND AD HOC AD DITION WAS MADE AND THERE WAS NO DEFINITE FINDING OF FACT THAT THE ASSESSEE CONCEALED PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTI CULARS OF INCOME. ULTIMATELY MATTER IS RESTORED TO THE FILE OF THE A O FOR RECONSIDERATION THEREFORE PENALTY WAS RIGHTLY CANCELLED BY THE LEA RNED CIT(A). ON DEPRECIATION THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT SUBMISSION OF THE ASSESSEE WAS NOT DISBELIEVED AND THAT IN THE CASE OF THE ASSESSEE PLANT AND MACHINERY WAS PURCHASED INS TALLED AND TRIAL PRODUCTION WAS COMMENCED. THEREFORE ON MERE DIFFER ENCE OF OPINION ITA NO.980/AHD/2007 ACIT CIR-5 AHMEDABAD VS PARLE INTERNATIONAL PVT. LTD. 7 THAT TRIAL PRODUCTION LED TO MANUFACTURING OF ARTIC LES PENALTY WAS IMPOSED THEREFORE PENALTY HAS BEEN RIGHTLY DELETE D BY THE LEARNED CIT(A). HE HAS FURTHER SUBMITTED THAT IT WAS NOT A DEBATABLE ISSUE AND THAT CLAIM WAS MADE ON THE BASIS OF EVIDENCE AND MA TERIAL ON RECORD. WITH REGARD TO CLAIM U/S 80 IA OF THE IT ACT THE L EARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AO ASKED THE ASSESSEE A S TO WHY EXPENSES OF HEAD OFFICE MARKETING OFFICE AND R & D UNIT SHO ULD NOT BE DEDUCTED FOR THE PURPOSE OF CLAIM OF DEDUCTION U/S 80 I OF T HE IT ACT. HE HAS SUBMITTED THAT THE ASSESSEE FURNISHED ALL THE PARTI CULARS OF DEDUCTION U/S 80 IA OF THE IT ACT AND THERE WAS A DIFFERENCE OF OPINION WITH REGARD TO COMPUTATION OF DEDUCTION ONLY WHICH WAS CORRECTE D AT THE ASSESSMENT STAGE BY FILING REVISED WORKING AFTER ALLOCATING EX PENSED OF ALL THE THREE UNITS. THEREFORE THE ASSESSEE HAS NOT FURNISHED AN Y INACCURATE PARTICULARS OF INCOME OR CONCEALED PARTICULARS OF I NCOME. THEREFORE PENALTY WAS RIGHTLY CANCELLED BY THE LEARNED CIT(A) . 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL AVAILABLE ON RECORD. 7. THE HONBLE SUPREME COURT IN THE CASE OF CIT VS RELIANCE PETROPRODUCTS PVT. LTD. 322 ITR 158 (SC) HELD THAT A GLANCE AT THE PROVISIONS OF SECTION 271(1) (C ) OF THE INCOME-TAX ACT 1961 SUGGEST THAT IN ORDER TO BE COVERED BY IT THERE HAS TO BE CONCEALMENT OF PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS I NCOME. THE MEANING OF THE WORD PARTICULARS USED IN SECTION 2 71(1) ( C ) WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. WHERE NO INF ORMATION GIVEN IN THE RETURN IS FOUND TO BE INCORRECT OR INACCURAT E THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PART ICULARS. IN ORDER TO EXPOSE THE ASSESSEE TO PENALTY UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION THE PENALTY PROVISION CAN NOT BE INVOKED. ITA NO.980/AHD/2007 ACIT CIR-5 AHMEDABAD VS PARLE INTERNATIONAL PVT. LTD. 8 BY NO STRETCH OF IMAGINATION CAN MAKING AN INCORREC T CLAIM TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. TH ERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETUR N FILED BY THE ASSESSEE BECAUSE THAT IS THE ONLY DOCUMENT WHERE T HE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUC H PARTICULARS ARE FOUND TO BE INACCURATE THE LIABILITY WOULD ARI SE. TO ATTRACT PENALTY THE DETAILS SUPPLIED IN THE RETURN MUST NO T BE ACCURATE NOT EXACT OR CORRECT NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY TH E ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FA LSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271( 1) ( C ). A MERE MAKING OF A CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REG ARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RE TURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTICULARS. DECISI ON OF THE GUJARAT HIGH COURT AFFIRMED. 8. THE HONBLE SUPREME COURT IN THE CASE OF M/S. RA JASTHAN SPINNING & WEAVING MILLS 2009 PIOL 63 SC HELD THAT ON EVERY DEMAND PENALTY IS NOT AUTOMATIC. 9. AS REGARDS SUPPRESSION OF SALES IT IS ADMITTED FACT THAT THE ADDITION WAS MADE ON ACCOUNT OF LOW YIELD OF PRODUC TION WHICH WAS COMPARED BY THE AO WITH OTHER UNITS. IT IS ALSO ADM ITTED FACT THAT THE ADDITION MADE BY THE AO WAS ULTIMATELY REDUCED BY T HE LEARNED CIT(A) AND WHEN THE MATTER TRAVELED TO THE TRIBUNAL THE T RIBUNAL RESTORED THE MATTER TO THE FILE OF THE AO FOR RECONSIDERATION OF THE ISSUE. THEREFORE THERE IS NO DEFINITE FINDING OF FACT ON RECORD THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME OR CONCE ALED THE PARTICULARS OF INCOME. THE ADDITION IS MERELY MADE ON ESTIMATE AND AD HOC BASIS ON WHICH THE LEARNED CIT(A) HAS RIGHTLY CANCELED THE P ENALTY U/S 271(1) ( C) ITA NO.980/AHD/2007 ACIT CIR-5 AHMEDABAD VS PARLE INTERNATIONAL PVT. LTD. 9 OF THE IT ACT. MORE SO WHEN THE MATTER WAS RESTORE D TO THE FILE OF THE AO ADDITION HAS BEEN DELETED BY THE TRIBUNAL IT WOULD NOT SUPPORT THE FINDINGS OF THE AO THAT PENALTY SHALL HAVE TO BE NE CESSARILY IMPOSED ON SUCH A MATTER. WE ACCORDINGLY DO NOT FIND ANY MERI T IN THE DEPARTMENTAL APPEAL ON CANCELING THE PENALTY ON SUCH ISSUE. THE DEPARTMENTAL APPEAL ON THIS ISSUE IS DISMISSED. 10. ON CLAIM OF DEPRECIATION IT IS ADMITTED FACT T HAT THE AO AND THE LEARNED CIT(A) MAINTAINED ADDITION AND WHEN THE MAT TER WENT TO THE ITAT AHMEDABAD ON QUANTUM THE APPEAL OF THE ASSESS EE ON THIS ISSUE WAS DISMISSED VIDE ORDER DATED 29-08-2000. THE PART IES HAVE REFERRED TO PARA 14 OF THE TRIBUNAL ORDER IN WHICH THE TRIBUNAL HAS SPECIFICALLY NOTED THAT THE CONCLUSION OF THE LEARNED CIT(A) THROUGH W HICH THE ASSESSEE COMMENCED TRIAL PRODUCTION IS 360 KGS. ONLY WHICH W AS NOT FOUND SUFFICIENT TO EVEN START TRIAL PRODUCTION. THE TRIB UNAL THEREFORE OPINED THAT THE DEPARTMENTAL AUTHORITIES WERE JUSTIFIED IN INCOMING TO THE CONCLUSION THAT THE ASSESSEE HAS FAILED TO SATISFAC TORILY PROVE THAT THE TRIAL PRODUCTION HAS IN FACT STARTED. IT WAS ALSO H ELD THAT THERE IS NO EVIDENCE LIKE PRODUCTION REPORT INDICATING THE QUAL ITY OF RAW MATERIAL CONSUMED AND PRODUCTION OF NOODLES AND THE NAMES OF DEALERS TO WHOM THE ALLEGED NOODLES WERE DISTRIBUTED FOR MARKETING. THE TRIBUNAL ULTIMATELY HELD THAT THE ASSESSEE IS NOT ENTITLED T O DEPRECIATION AS WELL AS THE CLAIM OF EXPENSES IN RELATION TO THE ALLEGED TR IAL PRODUCTION WHICH IS NOT SUPPORTED BY ANY EVIDENCE. THE FINDING OF FACT RECORDED BY THE TRIBUNAL IN THE CASE OF THE ASSESSEE THUS PROVES TH AT THE CLAIM OF THE ASSESSEE WAS IN FACT WRONG. IT IS SETTLED LAW THAT THE FINDINGS GIVEN IN THE ASSESSMENT ORDER ARE RELEVANT AND HAVE PROBATIVE VA LUE. WHEN THE ASSESSEE PRODUCES NO FRESH EVIDENCE OR PRESENTS ANY ADDITIONAL OR FRESH CIRCUMSTANCES IN THE PENALTY PROCEEDINGS HE WOULD BE DEEMED TO HAVE FAILED TO DISCHARGE THE ONUS PLACED ON HIM AND LEVY OF PENALTY WOULD BE JUSTIFIED. WE RELY UPON THE RECENT DECISION OF THE HONBLE DELHI HIGH ITA NO.980/AHD/2007 ACIT CIR-5 AHMEDABAD VS PARLE INTERNATIONAL PVT. LTD. 10 COURT IN THE CASE OF CIT VS HARPRASAD & CO. LTD. 32 8 ITR 53. IT MAY ALSO BE NOTED HERE THAT THE LEARNED CIT(A) DELETED THE P ENALTY HOLDING THAT THE ISSUE WITH REGARD TO DEPRECIATION IS DEBATABLE ONE. NO OTHER FINDING HAS BEEN GIVEN BY THE LEARNED CIT(A) IN THE IMPUGNED OR DER FOR DELETING THE PENALTY. THE BRIEF FINDINGS OF THE LEARNED CIT( A) IN PARA 4.1.4 4.1.5 AND 4.1.6 ARE REPRODUCED ABOVE IN THIS ORDER. THE B RIEF FINDING OF THE ORDER OF THE LEARNED CIT(A) WOULD NOT SERVE THE PRO VISION OF SECTION 250(6) OF THE IT ACT BECAUSE THE COMMISSIONER (APPEALS) AR E REQUIRED TO GIVE REASONS FOR DECISION IN THE APPELLATE ORDER WHILE D ISPOSING OF THE APPEALS. EVEN THE NOTING OF THE LEARNED CIT(A) THAT THE ISS UE OF DEPRECIATION IS DEBATABLE IS FACTUALLY INCORRECT BECAUSE THE FINDIN G OF FACT GIVEN BY THE TRIBUNAL IN THE CASE OF THE ASSESSEE IN WHICH IT WA S SPECIFICALLY NOTED THAT THE CLAIM OF THE ASSESSEE IS NOT BASED ON ANY POSITIVE EVIDENCE. IN THE LIGHT OF THE FINDING OF FACT RECORDED BY THE TR IBUNAL VIDE ORDER DATED 29-08-2000 CONFIRMING THE ADDITION ON THIS ISSUE T HE LEARNED CIT(A) WAS NOT JUSTIFIED IN CANCELING THE PENALTY BY PASSING A NON -SPEAKING ORDER. CONSIDERING THE FACTS AND CIRCUMSTANCES IT WOULD B E APPROPRIATE TO RESTORE THE MATTER TO THE FILE OF THE LEARNED CIT(A ) WITH DIRECTION TO RE- DECIDE THE ISSUE AFRESH BYPASSING REASONED ORDER IN WRITING GIVING POINT FOR DETERMINATION AND REASONS FOR DECISION IN THE A PPELLATE ORDER. THE LEARNED CIT(A) SHALL GIVE REASONABLE SUFFICIENT OPP ORTUNITY OF BEING HEARD TO THE ASSESSEE. IN THE RESULT PART OF THIS GROUND OF APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. 11. AS REGARDS PENALTY ON CLAIM U/S 80 I OF THE IT ACT THE AO NOTED IN THE ASSTT. ORDER THAT THE ASSESSEE MADE CLAIM O F DEDUCTION U/S 80 I OF THE IT ACT AND THE AO ASKED THE EXPLANATION OF T HE ASSESSEE AS TO WHY THE EXPENSES OF THE HEAD OFFICE AND OTHERS HAVE NOT BEEN ALLOCATED. THE ASSESSEE REVISED THE WORKING OF THE ALLOCATING EXPE NSES IN ALL THE THREE UNITS MENTIONED IN THE ASSESSMENT ORDER AND IN THE REVISED WORKING OF THE COMPUTATION OF ALLOCATING EXPENSES OF HEAD OFFI CE CLAIM OF DEDUCTION ITA NO.980/AHD/2007 ACIT CIR-5 AHMEDABAD VS PARLE INTERNATIONAL PVT. LTD. 11 U/S 80 I OF THE IT ACT WAS REDUCED. IT IS THEREFORE A MATTER WHERE THE AO GRANTED LESSER RELIEF ON THE BASIS OF PROFIT OF THE UNDERTAKING LESS PRORATE ADMINISTRATIVE EXPENSES OF CENTRAL OFFICE/HEAD OFFI CE. IT WOULD THEREFORE PROVE THAT THE ASSESSEE DISCLOSED ALL THE RELEVANT FACTS OF CLAIM OF DEDUCTION U/S 80 I OF THE IT ACT BEFORE THE AO AND ONLY THE COMPUTATION WAS REVISED ALLOCATING THE HEAD OFFICE EXPENSES FOR CERTAIN UNITS. THUS THE ASSESSEE HAS DISCLOSED ALL THE PARTICULARS OF D EDUCTION U/S 80 I OF THE IT ACT. THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF ARISUDANA SPINING MILLS LTD. 326 ITR 429 HELD THAT THE CLAIM OF SPECIAL DEDUCTION U/S 80 IA MADE AND DETAILS FURNIS HED BEFORE THE AO PENALTY CANNOT BE LEVIED. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE NOTED ABOVE WE FIND THAT THE ASSESSEE MADE A BONA FIDE CLAIM U/S 80 I OF THE IT ACT AND C LAIM OF THE ASSESSEE U/S 80 I OF THE ACT HAS NOT BEEN DISPUTED BY THE AU THORITIES BELOW. IT WAS ONLY THE WORKI0NG WITH REGARD TO ATTRIBUTING PRORAT A HEAD OFFICE EXPENSES WAS CONSIDERED AGAINST THE ASSESSEE WHICH WAS CORRE CTED BY THE ASSESSEE IN THE REVISED COMPUTATION AT THE ASSESSMENT STAGE. WE ARE THEREFORE OF THE VIEW THAT THAT THERE IS NO FINDING THAT ANY DET AILS FURNISHED BY THE ASSESSEE IN ITS RETURN OF INCOME ARE FOUND TO BE IN CORRECT OR ERRONEOUS OR FALSE INVITING PENALTY U/S 271 (1) ( C ) OF THE IT ACT. MERE MAKING A CLAIM WHICH IS NO SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS REGARDING INCOME OF THE ASSE SSEE. WE RELY UPON THE DECISION OF THE HONBLE SUPREME IN THE CASE OF RELIANCE PETROPRODUCTS PVT. LTD. (SUPRA). IN VIEW OF THE ABO VE DISCUSSIONS WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT(A) IN CANCELING THE PENALTY ON THIS ISSUE. THE FINDING OF FACT RECORDED BY THE LEARNED CIT(A) IS ACCORDINGLY CONFIRMED. IN THE RESULT DEPARTMENTAL APPEAL ON THIS ISSUE IS DISMISSED. ITA NO.980/AHD/2007 ACIT CIR-5 AHMEDABAD VS PARLE INTERNATIONAL PVT. LTD. 12 12. IN THE RESULT THE DEPARTMENTAL APPEAL IS ALLOW ED PARTLY FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 2-12-2010 SD/- SD/- (G. D. AGARWAL) VICE PRESIDENT (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 2-12-2010 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR ITAT AHMEDABAD